Nos. 09-987, 09-991
================================================================
In The
Supreme Court of the United States
---------------------------------♦--------------------------------ARIZONA CHRISTIAN SCHOOL
TUITION ORGANIZATION,
Petitioner,
v.
KATHLEEN M. WINN, et al.,
Respondents.
GALE GARRIOTT, in his official capacity as
Director of the Arizona Department of Revenue,
Petitioner,
v.
KATHLEEN M. WINN, et al.,
Respondents.
---------------------------------♦--------------------------------On Writs Of Certiorari To The
United States Court Of Appeals
For The Ninth Circuit
---------------------------------♦--------------------------------REPLY BRIEF FOR RESPONDENTS
SUPPORTING PETITIONERS
---------------------------------♦--------------------------------INSTITUTE FOR JUSTICE
TIMOTHY D. KELLER
Counsel of Record
PAUL V. AVELAR
398 S. Mill Avenue
Suite 301
Tempe, AZ 85281
(480) 557-8300
tkeller@ij.org
INSTITUTE FOR JUSTICE
WILLIAM H. MELLOR
RICHARD D. KOMER
CLARK M. NEILY III
901 N. Glebe Road
Suite 900
Arlington, VA 22203
(703) 682-9320
Counsel for Respondents in Support of Petitioners
Glenn Dennard, Luis Moscoso, and
Arizona School Choice Trust
================================================================
COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831
i
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .................................
iii
REPLY BRIEF FOR RESPONDENTS SUPPORTING PETITIONERS ...............................
1
ARGUMENT ........................................................
2
I.
ARIZONA’S SCHOLARSHIP PROGRAM
IS A PROGRAM OF GENUINE PRIVATE
CHOICE AND THEREFORE DOES NOT
IMPLICATE THE ESTABLISHMENT
CLAUSE. ...................................................
3
A. School Tuition Organizations Are Not
Government Actors ..............................
5
1. School Tuition Organizations Are
Privately Created ...........................
5
2. School Tuition Organizations Operate Independently From Any
Government Official .......................
9
3. The Receipt Of Tax-Credit-Eligible
Contributions Does Not Transform
School Tuition Organizations Into
State Actors .................................... 12
4. Compliance With State Regulations Does Not Transform School
Tuition Organizations Into State
Actors .............................................. 14
5. Conclusion ...................................... 15
B. The State Does Not Skew Incentives
Toward Religion ................................... 16
ii
TABLE OF CONTENTS—Continued
Page
C. The Establishment Clause Does Not
Prohibit Individuals From Using Indirect Educational Aid To Obtain A
Religious Education............................. 19
II.
ARIZONA’S SCHOLARSHIP PROGRAM
SERVES LOW- AND MODERATEINCOME FAMILIES. ................................ 22
CONCLUSION..................................................... 25
iii
TABLE OF AUTHORITIES
Page
CASES
Agostini v. Felton, 521 U.S. 203 (1997) ......................21
Blum v. Yaretsky, 457 U.S. 991 (1982) ............. 9, 12, 15
Bowen v. Kendrick, 487 U.S. 589 (1988) ....................21
Corp. of the Presiding Bishop of the Church of
Jesus Christ of Latter-Day Saints v. Amos,
483 U.S. 327 (1987) .................................................16
Everson v. Bd. of Educ., 330 U.S. 1 (1947) ..................3
Flagg Bros., Inc. v. Brooks, 436 U.S. 149 (1978) .......12
Freedom from Religion Found. v. Geithner, NO.
CIV. 2:09-2894 WBS DAD, 2010 U.S. Dist.
LEXIS 50413 (E.D. Cal. May 21, 2010)....................8
Hibbs v. Winn, 542 U.S. 88 (2004) ............................. 11
Jackson v. Metro. Edison Co., 419 U.S. 345
(1974) .................................................................12, 15
Kotterman v. Killian, 972 P.2d 606 (Ariz. 1999) ........ 11
Locke v. Davey, 540 U.S. 712 (2004) ..........................20
Mitchell v. Helms, 530 U.S. 793 (2000) ......................21
Mueller v. Allen, 463 U.S. 388 (1983) .......... 1, 8, 16, 20
Rendell-Baker v. Kohn, 457 U.S. 830 (1982) .........9, 13
Walz v. Tax Comm’n, 397 U.S. 664 (1970) ...................8
Winn v. Ariz. Christian Sch. Tuition Org., 562
F.3d 1002 (9th Cir. 2009) .............................. 4, 10, 14
Winn v. Ariz. Christian Sch. Tuition Org., 586
F.3d 649 (9th Cir. 2009) ......................................1, 15
iv
TABLE OF AUTHORITIES—Continued
Page
Witters v. Wash. Dep’t of Servs. for the Blind,
474 U.S. 481 (1986) .................................................19
Zelman v. Simmons-Harris, 536 U.S. 639
(2002) ............................................................... passim
Zobrest v. Catalina Foothills Sch. Dist., 509
U.S. 1 (1993) .................................................. 4, 18, 20
CONSTITUTIONAL PROVISIONS
U.S. Const. amend. I ....................................................2
U.S. Const. amend. XIV ...............................................2
STATE STATUTES
Ariz. Rev. Stat. § 15-181 .............................................18
Ariz. Rev. Stat. § 15-816.01 ........................................18
Ariz. Rev. Stat. § 43-1089 .............................................1
Ariz. Rev. Stat. § 43-1602 .........................................6, 7
Ariz. Rev. Stat. § 43-1603 .......................................6, 10
FEDERAL STATUTES
26 U.S.C. § 501(c)(3) .............................................6, 7, 9
v
TABLE OF AUTHORITIES—Continued
Page
OTHER PUBLICATIONS
Ariz. Dept. of Revenue, A Manual for School
Tuition Organizations (Aug. 23, 2010), available at http://www.azdor.gov/LinkClick.aspx?
fileticket=CKcT5ZKMobY%3d&tabid=240 ..............7
Ariz. Dept. of Revenue, Individual Income Tax
Credit for Donations to Private School Tuition Organizations: Reporting for 2009 (Apr.
21, 2010), available at http://www.azdor.
gov/Portals/0/Reports/private-school-tax-creditreport-2009.pdf .......................................................17
Ariz. Sch. Choice Trust, Arizona School Choice
Trust was founded for educational opportunity
for low-income families, http://www.asct.org/
Founders.shtml .........................................................6
Memorandum from Holly B. Hunnicutt, Ariz.
Leg. Counsel (June 24, 2010), available at
http://www.azleg.gov/alisPDFs/council/2010%20
Renumbering%20memo.pdf......................................6
Ronald J. Hansen, Private-school tax credits
save $8.3 million, Arizona Republic, Oct. 20,
2009 .........................................................................12
Vicki E. Murray, Ph.D., An Analysis of Arizona
Individual Income Tax-credit Scholarship
Recipients’ Family Income, 2009-10 School
Year, Program on Education Policy and Governance, Harvard University 10-18 (October
2010), available at http://www.hks.harvard.edu/
pepg/PDF/Papers/PEPG10-18_Murray.pdf..... 22, 23, 24
1
REPLY BRIEF FOR RESPONDENTS
SUPPORTING PETITIONERS
The constitutional question in this case is whether Arizona’s Scholarship Program (the “Scholarship
Program”), A.R.S. § 43-1089, is a program of true
private choice. When private choices direct the flow of
money in an educational aid program, “ ‘no imprimatur of state approval’ can be deemed to have been
conferred on any particular religion, or on religion
generally.” Zelman v. Simmons-Harris, 536 U.S. 639,
650 (2002) (quoting Mueller v. Allen, 463 U.S. 388,
399 (1983) (emphasis added)). When educational aid
reaches schools only as a result of true private
choice—as it does in the Scholarship Program—then
the government does not skew incentives toward
religious schools and “the program [will therefore]
survive scrutiny under the Establishment Clause.”
Id.
The Scholarship Program is plainly one in which
educational aid reaches schools only through the
“genuine and independent choices of private individuals.” Id. at 649. Any individual can create a School
Tuition Organization. Any individual can contribute
to any School Tuition Organization and claim the tax
credit. And any individual can apply for any scholarship offered by any School Tuition Organization. The
state has no involvement beyond “making tax credits
available. After that, the government takes its hands
off the wheel.” Winn v. Ariz. Christian Sch. Tuition
Org., 586 F.3d 649, 660 (9th Cir. 2009) (O’Scannlain,
J., dissenting from order denying rehearing en banc).
2
Because the Scholarship Program is one of true
private choice, it simply does not implicate the Establishment Clause, which was designed to prevent
government endorsement of religion, not limit educational options for parents. See Zelman, 536 U.S. at
647, 652. The Ninth Circuit’s contrary decision was
erroneous and should be reversed.
---------------------------------♦---------------------------------
ARGUMENT
The First Amendment to the U.S. Constitution,
as applied to the states through the Fourteenth
Amendment, is concerned with whether the Scholarship Program constitutes impermissible governmental
advancement or endorsement of religion. Programs
that permit families to freely and independently use
educational aid to attend religious institutions do not
offend the Establishment Clause. Therefore, the
constitutional question in this case is whether the
Scholarship Program is an educational aid program of
genuine private choice.
Private choice is the defining characteristic of
Arizona’s tax credit program. Private individuals
choose to set up scholarship organizations. Private
individuals freely decide which organizations they
donate to. And parents make the choice where to
enroll their children. Under these circumstances,
“no reasonable observer would think a neutral program of private choice, where state aid reaches religious schools solely as a result of the numerous
3
independent decisions of private individuals, carries
with it the imprimatur of government endorsement.”
Zelman, 536 U.S. at 655.
The Court’s “decisions have drawn a consistent
distinction between government programs that provide aid directly to religious schools and programs of
true private choice, in which government aid reaches
religious schools only as a result of the genuine and
independent choices of private individuals.” Zelman,
536 U.S. at 649 (citations omitted). Starting with
Everson v. Bd. of Educ., 330 U.S. 1 (1947) (upholding
use of public funds to transport children to religious
schools that provide them with religious instruction),
the Court has consistently rejected Establishment
Clause challenges to indirect educational aid programs that are based on private, individual choice.
The Court has not only rejected those challenges but
has held that such programs do not even implicate
the Establishment Clause. Zelman, 536 U.S. at 649.
Indeed, the Court has “never found a program of true
private choice to offend the Establishment Clause.”
Id. at 653.
I.
ARIZONA’S SCHOLARSHIP PROGRAM IS
A PROGRAM OF GENUINE PRIVATE
CHOICE AND THEREFORE DOES NOT IMPLICATE THE ESTABLISHMENT CLAUSE.
The Court has “consistently held that government programs that neutrally provide benefits to a
4
broad class of citizens defined without reference to
religion are not readily subject to an Establishment
Clause challenge just because sectarian institutions
may receive an attenuated financial benefit.” Zobrest
v. Catalina Foothills Sch. Dist., 509 U.S. 1, 8 (1993).
The Scholarship Program allows any Arizona taxpayer to donate to any School Tuition Organization and
claim a tax credit. It also allows any parent to apply
to any School Tuition Organization for a scholarship
to any private school funded by that organization.
Respondent Taxpayers concede that the Scholarship Program is facially neutral with regard to religion. Winn Br. 3. They also concede that it “is neutral
with respect to the taxpayers who direct money to
[School Tuition Organizations] . . . [meaning that] the
program’s aid that reaches a [School Tuition Organization] does so only as a result of the genuine and
independent choice of an Arizona taxpayer.” Winn v.
Ariz. Christian Sch. Tuition Org., 562 F.3d 1002, 1018
(9th Cir. 2009).
The Scholarship Program offers taxpayers a
genuine choice of which School Tuition Organizations
they donate to and parents a genuine choice of where
to enroll their children. Yet Respondent Taxpayers
continue to press their argument that the program
violates the Establishment Clause. Their argument
hinges on three erroneous premises. First, that
School Tuition Organizations are state actors merely
because the scholarships they award to families are
“subsidized” by the state and because those organizations are subject to regulations designed to prevent
5
fraud and abuse. Second, that the program skews
parents’ choices toward religious schools despite
genuine private choice. And third, that the same
constitutional limitations that apply to direct aid
programs also apply to indirect aid programs.
A. School Tuition Organizations Are Not
Government Actors.
Respondent Taxpayers’ overarching theme is that
School Tuition Organizations are creatures of the
state, and are established and supervised by the state
to administer what Respondents persistently mischaracterize as a “government spending program.”
Winn Br. 1. But School Tuition Organizations are
privately created and privately controlled. They are
not government actors. They are private actors.
Neither the receipt of government “subsidized” scholarship funds nor being subject to modest government
regulation transform these private entities into state
actors.
1. School Tuition Organizations Are
Privately Created.
School Tuition Organizations are privately created nonprofit organizations permitted by federal law
to receive tax-deductible contributions and by state
law to receive tax-credit-eligible donations. The
government did not create School Tuition Organizations. The first School Tuition Organization to open
its doors in Arizona was the Arizona School Choice
6
Trust, one of the Respondents in Support of Petitioners. The School Choice Trust was privately
founded five years before Arizona authorized a tax
credit for contributions to such organizations. Ariz.
Sch. Choice Trust, Arizona School Choice Trust was
founded for educational opportunity for low-income
families, http://www.asct.org/Founders.shtml (last
visited Oct. 13, 2010). Thus, when Arizona enacted
the Scholarship Program, it was not creating a new
type of charitable work or entity, but rather it was
recognizing the valuable work being done by the
School Choice Trust in expanding parental options in
education to include private schools. This underscores
the Legislature’s purpose for enacting the Scholarship
Program: its legitimate interests in giving parents
educational choice. There was no improper religious
motivation.
There are a few specific requirements School
Tuition Organizations must satisfy in order to receive
tax-credit-eligible contributions. A.R.S. § 43-1602(A);
Dennard App.1 6a-7a; A.R.S. § 43-1603; Dennard App.
9a-11a. These requirements are: (1) the organization
is exempt from federal taxation under 26 U.S.C.
1
“Dennard App.” refers to the Appendix to Brief of Respondents in Support of Petitioners filed by Glenn Dennard,
Luis Moscoso, and the Arizona School Choice Trust (“Dennard
Br.”). Their Appendix refers to A.R.S. § 43-1601, et seq., as A.R.S.
§ 1501, et seq. due to statutory renumbering that took place after
the bill’s adoption. Memorandum from Holly B. Hunnicutt, Ariz.
Leg. Counsel (June 24, 2010), available at http://www.
azleg.gov/alisPDFs/council/2010%20Renumbering%20memo.pdf.
7
§ 501(c)(3), A.R.S. § 43-1602(A); Dennard App. 6a-7a;
(2) the organization allocate at least 90 percent of its
annual revenue for education scholarships, A.R.S.
§ 43-1603(B)(1); Dennard App. 9a; (3) the organization does not limit its scholarships to students of only
one school, A.R.S. § 43-1603(B)(2); Dennard App. 10a;
(4) the organization does not award scholarships
based solely on donor recommendations, A.R.S. § 431603(B)(3); Dennard App. 10a; and (5) the organization does not knowingly allow taxpayers to “swap”
donations in an effort to benefit their own children,
A.R.S. § 43-1603(B)(4); Dennard App. 10a. These
requirements ensure that contributions to School
Tuition Organizations benefit the general public and
not individual taxpayers.
The Department of Revenue requires any School
Tuition Organization desiring to receive tax-crediteligible donations to certify on a preapproved form
that it satisfies these requirements. Ariz. Dept. of
Revenue, A Manual for School Tuition Organizations
29 Attach. 1 (Aug. 23, 2010), available at http://
www.azdor.gov/LinkClick.aspx?fileticket=CKcT5ZKM
obY%3d&tabid=240. There is no annual recertification requirement. Id. at 3. The Department may
“decertify” School Tuition Organizations that fail to
comply with these requirements, but contributions to
decertified organizations would still be eligible for a
federal tax deduction so long as the organization
remains a federally-recognized 501(c)(3) organization.
8
That contributions to non-state certified School
Tuition Organizations are still federally tax-deductible
underscores the fact that, while quantitatively different, other types of tax-reducing mechanisms—such as
tax deductions, tax exemptions, and tax credits of less
than 100 percent—are qualitatively the same as the
tax credit at issue in this case.
The comparative value of a tax benefit to the
taxpayer is a function of whether the taxpayer has
taxable income and owes taxes, as well as the marginal tax rate on the income. As the marginal tax rate
climbs, the quantitative distinction between the effect
of 100 percent credits and deductions fades. See
Freedom from Religion Found. v. Geithner, NO. CIV.
2:09-2894 WBS DAD, 2010 U.S. Dist. LEXIS 50413,
at *16-17 (E.D. Cal. May 21, 2010) (finding no “meaningful distinction between tax deductions or exclusions and tax credits” because even though they “do
not create dollar-for-dollar reductions in tax liability
. . . they reduce tax liability by a percentage directly
related to one’s income tax bracket.”).
Establishment Clause analysis cannot be driven
by the percentage of return (100 percent v. 99 percent
v. 90 percent v. 50 percent v. 1 percent) on contribution. See Mueller, 463 U.S. at 390 (rejecting Establishment Clause challenge to tax deduction for tuition
paid to religious private schools); see also Walz v. Tax
Comm’n, 397 U.S. 664, 680 (1970) (rejecting Establishment Clause challenge to property tax exemption to
religious organizations for property used for religious
purposes). It is thus irrelevant to the constitutional
9
analysis whether the benefit is a 100 percent tax
credit, a tax deduction, or an exemption.
Finally, Respondent Taxpayers assert that,
pursuant to Arizona’s recent legislative amendments,
contributions to School Tuition Organizations are no
longer “charitable donations” because the statute no
longer refers to them as “charitable organizations,”
but rather as “nonprofit organizations.” Under
§ 501(c)(3), “charitable” organizations are but one of a
number of nonprofit organizations qualified to receive
tax deductible contributions—other types include
those organized for “religious,” “educational” and
“scientific” purposes. 26 U.S.C. § 501(c)(3). Debating
whether School Tuition Organizations are best described as “charitable,” “educational,” or even “religious” organizations is a debate over inconsequential
semantics.
2. School Tuition Organizations Operate Independently From Any Government Official.
“[A] State normally can be held responsible for a
private decision only when it has exercised coercive
power or has provided such significant encouragement, either overt or covert, that the choice must in
law be deemed to be that of the State.” Blum v.
Yaretsky, 457 U.S. 991, 1004 (1982) (holding that
private nursing homes that received reimbursement
from the Medicaid program were not state actors);
Rendell-Baker v. Kohn, 457 U.S. 830, 840 (1982)
10
(holding that private schools funded almost entirely
by reimbursement payments from the state for
providing special education services to publicly placed
students were not state actors). In this case, the state
does not control any decisions made under the Scholarship Program. The state has nothing to do with the
scholarship-granting decisions made by School Tuition Organizations. As the Ninth Circuit explained,
“Arizona does not specify scholarship eligibility
criteria or dictate how [School Tuition Organizations]
choose the students who receive scholarships.”2 Winn,
562 F.3d at 1006. And the Respondent Taxpayers
concede that “[School Tuition Organizations] are free
to award scholarships . . . to students chosen by them,
according to their standards, from among all the
school-age children in Arizona.” Winn Br. 46. Such
unrestricted freedom is a far cry from coercive state
action.
In the clear absence of any overt state effort to
advance religion, Respondent Taxpayers essentially
urge the Court to find covert action in the fact that
the Department of Revenue “allows” School Tuition
Organizations to award scholarships only to the
2
The recent legislative amendments to the program did add
a requirement that School Tuition Organizations “shall consider
the financial need of applicants” and prohibits donors from
designating particular students as a condition of contributing to
a School Tuition Organization, A.R.S. § 43-1603(B)(4), (D)(2);
Dennard App. 10a-11a, but that does not alter the fact that
scholarship award decisions remain in the hands of School
Tuition Organizations.
11
private schools of their own choosing. But there is
nothing suspicious or untoward about this; to the
contrary, it is merely implementation of the law as
written. It was plainly evident from the text of the
original statute—and it is clear from the statute that
will go into effect January 1, 2011—that a School
Tuition Organization can restrict the total number of
private schools to which it awards scholarships, so
long as it does not award scholarships to only one
school. Hibbs v. Winn, 542 U.S. 88, 95 (2004) (explaining that School Tuition Organizations “must designate at least two schools whose students will receive
funds”); Kotterman v. Killian, 972 P.2d 606, 626 (Ariz.
1999) (Feldman, J., dissenting) (“[A] group of taxpayers who subscribe to a particular religion may form
a[ ] [School Tuition Organization] that will support
only schools of that religion.”). Indeed, Respondent
Taxpayers concede that “from the inception” of the
program, School Tuition Organizations have been
permitted to restrict scholarships only to particular
religious schools. Winn Br. 11. There is no state
coercion in giving School Tuition Organizations the
freedom to award scholarships to particular types of
schools.
School Tuition Organizations make private, independent decisions to serve different constituencies
and organize themselves along a number of different
lines and concerns, including religious, geographic,
pedagogical, and economic. The state neither encourages nor discourages any particular type of School
Tuition Organization. Rather, the state, in purely
12
ministerial fashion, simply ensures that each organization satisfies the criteria discussed in section I.A.
above—nothing more. This minor regulatory role does
not transform School Tuition Organizations’ activities
into state action. Blum, 475 U.S. at 1004-05 (“Mere
approval of or acquiescence in the initiatives of a
private party is not sufficient to justify holding the
State responsible for those initiatives under the
terms of the Fourteenth Amendment.”) (citing Flagg
Bros., Inc. v. Brooks, 436 U.S. 149, 164-65 (1978) and
Jackson v. Metro. Edison Co., 419 U.S. 345, 357
(1974)). The state plays no role in the scholarshipgranting decisions of School Tuition Organizations.
3. The Receipt Of Tax-Credit-Eligible
Contributions Does Not Transform
School Tuition Organizations Into
State Actors.
Respondent Taxpayers argue that because contributions to School Tuition Organizations are eligible
for a 100 percent tax credit, up to the modest limit of
$500 per individual or $1,000 per married couple
filing jointly, those contributions are the equivalent of
state-income tax revenues and that they should be
considered state “expenditures.” Winn Br. 6. On one
side of the ledger, the Scholarship Program does
reduce state revenues. On the other side of the ledger
are the savings the state realizes from being relieved
of the duty to pay for participating children’s educations. See Ronald J. Hansen, Private-school tax credits save $8.3 million, Arizona Republic, Oct. 20, 2009.
13
Though the precise dollar amount of savings to the
state is a subject of debate, the fact that the program
ultimately saves the state money makes it difficult to
characterize it as a state spending program.
Even if the Court were to decide that tax-crediteligible contributions constitute a form of state “expenditures,” the fact that the contributions essentially pass through School Tuition Organizations does not
transform these private entities into state actors. In
Rendell-Baker v. Kohn, the Court considered a legal
challenge to the employment practices of a private
school that received “virtually all of [its] income . . .
from government funding.” 457 U.S. at 840. Public
school districts were contracting with the private
school to purchase special education services just as
Scholarship Program parents here purchase educational services from private schools. The Court’s
conclusion in Rendell-Baker that the government
contracts “[did] not make the . . . [private school’s]
decisions acts of the State,” id., applies here.
It is also important to identify exactly who the
Scholarship Program is designed to aid. The Scholarship Program aids school children and their families.
It does not aid School Tuition Organizations. Indeed,
those organizations are not able to keep the vast
majority of the contributed funds. They can keep only
a small amount to cover their administrative costs.
The Scholarship Program also does not aid taxpayers
because their contribution merely reduces their tax
liability by the amount contributed, meaning they
realize no net financial gain from their contribution.
14
It is parents and children who receive the money in
the form of scholarships. Families, therefore, are the
beneficiaries of the Scholarship Program. Families
use the scholarships to purchase educational services
from private schools and their decisions to do so are
not “acts of the state.”
The funding for the challenged program flows
from the decisions of individual taxpayers, who write
checks drawn from their personal bank accounts, to
School Tuition Organizations and then to parents—
who independently decide where to enroll their
children and which School Tuition Organizations to
apply to for scholarship funds. Not a single dollar is
transferred from the state to any School Tuition
Organization. “The availability of scholarships to
particular students and particular schools thus
depends [not on government decision makers, but] on
the amount of funding a [School Tuition Organization] receives [from taxpayer contributions.]” Winn,
562 F.3d at 1006. Receipt by School Tuition Organizations of funds from private citizens intended to benefit other private citizens cannot form the basis of a
finding that School Tuition Organizations are state
actors.
4. Compliance With State Regulations
Does Not Transform School Tuition
Organizations Into State Actors.
Respondent Taxpayers argue that the recent
legislative amendments to the Scholarship Program
15
alter the very nature of School Tuition Organizations.
But, as explained more fully in all of the Replies to
the Respondent Taxpayers’ Supplemental Brief
Regarding a Change in State Law, nothing about the
revised structure of the Scholarship Program alters
the fact that “individuals voluntarily . . . contribute
money” to School Tuition Organizations and that “the
state’s involvement stops with . . . making tax credits
available.” Winn, 586 F.3d at 659-60 (O’Scannlain, J.,
dissenting). Each School Tuition Organization’s decision to support either religious or secular schools—or
both—is in no way influenced by the state. And while
the legislative amendments add some modest regulatory oversight, the “mere fact that a business is
subject to state regulation does not by itself convert
its action into that of the State.” Blum, 475 U.S. at
1004 (quoting Jackson, 419 U.S. at 350).
5. Conclusion
In sum, there is no government involvement with
religion whatsoever pursuant to the Scholarship
Program. The government does not give money to any
School Tuition Organization. No government actor
decides which children receive scholarships from
School Tuition Organizations. The relationship between the tax benefit to the taxpayer and the decision
by parents to send their children to religious schools
and apply for scholarships from religiously affiliated
School Tuition Organizations is simply too attenuated
and too variable over time to constitute government
involvement with religion. Therefore, the Scholarship Program does not implicate the Establishment
16
Clause. Mueller, 463 U.S. at 400 (“The historic purposes of the [Establishment] Clause simply do not
encompass the sort of attenuated financial benefit,
ultimately controlled by the private choices of individual parents, that eventually flows to parochial
schools from the neutrally available tax benefit at
issue in this case.”).
B. The State Does Not Skew Incentives
Toward Religion.
The question at the center of this case is whether
“the government itself has advanced religion through
its own activities and influence.” Corp. of the Presiding Bishop of the Church of Jesus Christ of Latter-Day
Saints v. Amos, 483 U.S. 327, 337 (1987). As demonstrated in section I.A. above, the answer to that question is no. However, Respondent Taxpayers assert
that the answer is yes because of the unrestricted
freedom School Tuition Organizations enjoy to award
scholarships—including the ability to award scholarships only to families who choose to enroll their
children in religiously affiliated schools. Winn Br.
11-14. This argument is not only premised on the
unfounded notion that School Tuition Organizations
do not offer scholarships to nonreligious schools,3 but
3
According to a 2009 Department of Revenue report, the
following secular School Tuition Organizations, among others,
had ample resources to grant scholarships to nonreligious
private schools: Arizona Scholarship Fund ($5,159,220); Institute for a Better Education ($4,803,063); Tuition Organization
for Private Schools ($1,474,937); Arizona Private Education
(Continued on following page)
17
also improperly focuses solely on the Scholarship
Program rather than the full array of educational
choices Arizona provides to parents.
The question is whether Arizona “is coercing
parents into sending their children to religious
schools, and that question must be answered by
evaluating all options” Arizona “provides [its] schoolchildren, only one of which is to obtain a program
scholarship and then choose a religious school.”
Zelman, 536 U.S. at 656. By examining the Scholarship Program in light of the vast array of nonreligious
educational options Arizona provides to families, it is
abundantly clear that the state is not skewing incentives toward religion.
Respondent Taxpayers ignore the full range of
educational choices available to Arizona parents.
Instead, they focus on an alleged dearth of available
scholarships to attend nonreligious private schools.
Putting aside the fact that many School Tuition
Organizations provide scholarships to nonreligious
schools, Arizona offers families one of the broadest
arrays of educational choices in the nation. Dennard
Br. 39-43. These options include, among others, a
Scholarship Fund ($1,466,020); and the Arizona School Choice
Trust ($1,022,823) (one of the Intervenors and Respondents in
Support of Petitioners in this case). Ariz. Dept. of Revenue,
Individual Income Tax Credit for Donations to Private School
Tuition Organizations: Reporting for 2009 (Apr. 21, 2010),
available at http://www.azdor.gov/Portals/0/Reports/privateschool-tax-credit-report-2009.pdf.
18
robust charter school law and open public school
enrollment that prohibits school districts from charging parents tuition. A.R.S. § 15-181, et seq.; A.R.S.
§ 15-816.01. In Zelman, the Court looked to precisely
these types of additional public options in concluding
that there was “no evidence that the program fails to
provide genuine opportunities for Cleveland parents
to select secular educational options for their schoolage children.” Zelman, 536 U.S. at 655 (noting that
students could “remain in public school as before . . .
obtain a scholarship . . . enroll in a community school,
or enroll in a magnet school”). And while such a wide
array of options “are not necessary” to the constitutionality of indirect programs based on private choice,
they do “clearly dispel the claim that the program
‘creates . . . financial incentives for parents to choose
a sectarian school.’ ” Zelman, 536 U.S. at 654 (quoting
Zobrest, 509 U.S. at 10).
In seeking to distinguish Zelman’s holding,
Respondent Taxpayers misconstrue and misrepresent
the program upheld in that case. The Cleveland
program did not require nonreligious private schools
to participate. Zelman, 536 U.S. at 645. It was thus
entirely plausible that the program in Zelman could
have resulted in parents not being able to choose
nonreligious schools. The program permitted—but
did not require—area public schools to participate
and, indeed, none chose to do so. Id. at 645-47. Of
the private schools that chose to participate, 82
percent were religious, with approximately 96 percent
of voucher recipients attending religious schools.
19
Id. And yet, the Court said that merely because “46
of the 56 private schools now participating in the
program are religious schools does not condemn it as
a violation of the Establishment Clause.” Id. at 655.
Thus, even where no public schools participated and
the overwhelming majority of private schools participating in the program were religious, the Court held
there were “no ‘financial incentives’ that ‘skew’ the
program toward religious schools.” Id. at 653 (quoting
Witters v. Wash. Dep’t of Servs. for the Blind, 474 U.S.
481, 487-88 (1986)).
The Scholarship Program leaves the decision to
contribute to School Tuition Organizations in the
hands of taxpayers. It leaves the decision for which
schools to award scholarships in the hands of School
Tuition Organizations. And it leaves the decision of
which private schools to enroll their children in and
which School Tuition Organizations to apply to for
scholarship funds in the hands of parents. And those
parents had a plethora of public schools, including
numerous charter schools, to choose from. A program
so thoroughly controlled by private choice does not
violate the Establishment Clause.
C. The Establishment Clause Does Not
Prohibit Individuals From Using Indirect Educational Aid To Obtain A Religious Education.
Respondent Taxpayers assert that before Zelman,
individuals were not permitted “to use tax-raised
funds” at “religious schools to support the religious
20
instructional activities of those schools.” Winn Br. 48.
That assertion is wrong. In every one of the Court’s
indirect educational aid cases, the government aid at
issue was used to support religious instructional
activities, and in each case the educational aid program was upheld. In Zobrest, 509 U.S. at 4 n. 1, it
was stipulated that “secular education and advancement of religious values or beliefs [we]re inextricably
intertwined” in the Catholic school in which petitioner Zobrest’s parents enrolled him. And the Court
made it clear that the government-funded sign language interpreter, to which petitioner Zobrest was
entitled, would transmit the pervasively sectarian
content taught in the high school. Id. at 13. In Witters, 474 U.S. at 482, government aid was given to “a
blind person studying at a Christian college and
seeking to become a pastor, missionary, or youth
director.” Naturally, pursuing a degree in vocational
ministry involves religious instruction. And, of course,
Mueller, 463 U.S. 388, involved a tax deduction for
tuition at religious schools that imposed no requirement that students must be allowed to opt out of the
school’s religious instruction. Under the Court’s
“Establishment Clause precedent, the link between
government funds and religious training is broken by
the independent and private choice of recipients.”
Locke v. Davey, 540 U.S. 712, 719 (2004). It is thus
constitutionally permissible to give families the
choice to use educational aid to purchase a religious
education.
21
Respondent Taxpayers base their argument on
Bowen v. Kendrick, 487 U.S. 589 (1988), which involved government grants to religious institutions for
counseling and education services pursuant to a
federal program designed to educate adolescents
about family life. While aspects of Bowen are instructive, particularly as it relates to whether the
Scholarship Program is supported by a legitimate
government interest, there are nevertheless significant limits to its applicability in this case because
it involved a direct—rather than an indirect—aid
program.
In Bowen, government officials selected which
organizations received federal funds. Thus, the Court
imposed some limits on exactly how those organizations could use the aid. Here, the government does
not choose which School Tuition Organizations receive money or, in turn, to which families the School
Tuition Organizations give scholarships. In two postBowen cases involving direct aid programs, the Court
said “the question of whether governmental aid to
religious schools results in governmental indoctrination is ultimately a question whether any religious
indoctrination that occurs in those schools could
reasonably be attributed to government action.”
Agostini v. Felton, 521 U.S. 203, 230 (1997) and
Mitchell v. Helms, 530 U.S. 793, 809 (2000) (plurality
opinion). Thus, even in direct aid cases private choice
is still determinative. Because there are no decisions
made by governmental actors under the Scholarship
Program, it would be unreasonable to attribute any
22
parents’ decision to enroll their child in a religious
school and obtain a religious education to governmental coercion.
Regardless of the constitutional restrictions
imposed on direct governmental aid programs, the
Court has never struck down an indirect educational
aid program characterized by true private choice
merely because families use that aid to obtain a
religious education. Respondent Taxpayers offer no
compelling arguments for the Court to do so here.
II.
ARIZONA’S SCHOLARSHIP PROGRAM
SERVES LOW- AND MODERATE-INCOME
FAMILIES.
Faced with a dearth of favorable case law, Respondent Taxpayers resort to a form of ad hominem
argument by citing to a number of articles published
by The Arizona Republic and The East Valley Tribune.
Winn Br. 10, 43; Winn Opp’n Br. 9-11. These articles
cast aspersions on the Scholarship Program as primarily awarding scholarships to wealthy families.
But a recent survey by Dr. Vicki Murray of studentlevel data obtained directly from School Tuition
Organizations demonstrates that the program does
a good job of serving low- and moderate-income
families. Vicki E. Murray, Ph.D., An Analysis of
Arizona Individual Income Tax-credit Scholarship
Recipients’ Family Income, 2009-10 School Year,
Program on Education Policy and Governance, Harvard University 10-18 (October 2010), available at
23
http://www.hks.harvard.edu/pepg/PDF/Papers/PEPG10
-18_Murray.pdf.
Dr. Murray’s analysis assessed The East Valley
Tribune’s and The Arizona Republic’s repeated claim
that Arizona’s Scholarship Program does not serve
low-income families. Id. at 2. Those newspapers
interviewed officials or cited related statistics from
approximately 15 of the 55 School Tuition Organizations operating at the time. Id. Yet neither newspaper
collected student-level income data to verify that
allegation. Id. Dr. Murray collected family income
and related data directly from School Tuition Organizations for 19,990 students during the 2009-10 school
year, which represents nearly 80 percent of all scholarships awarded in 2009. Id. at 5-6. Her analysis also
compared the family incomes of scholarship recipients
to U.S. Census Bureau median family incomes using
addresses and zip codes provided by School Tuition
Organizations. Id. at 6. The results of her analysis
show:
•
Scholarship recipients’ median family income was $55,458—nearly $5,000 lower
than the U.S. Census Bureau statewide
median annual income of $60,426. It was
also nearly $5,000 lower than median
incomes in recipients’ neighborhoods, as
estimated using student addresses and
zip codes. Id. at 14.
•
The annual family income of more than
two-thirds (66.8 percent) of scholarship recipients would qualify them for
another of Arizona’s educational aid
24
programs, the corporate tax credit scholarship program, eligibility for which is
capped at $75,467 for a family of four.
Id. at 15.
•
A higher proportion of scholarship recipients come from families whose incomes
qualify them as poor (at or below
$20,050 for a family of four) than the
U.S. Census Bureau statewide average,
12.8 percent compared to 10.2 percent.
Id.
Dr. Murray’s analysis found no factual basis for
the claims that Arizona’s Scholarship Program limits
access to privileged students from higher-income
families. Id. at 16. Instead, an overwhelming majority
of the individuals receiving scholarships under the
Scholarship Program also qualify for Arizona’s separate, means-tested and corporately-funded scholarship program. Id.
Arizona’s Scholarship Program is not just a
program of private choice, it is a vital educational aid
program that is helping tens of thousands of low- and
middle-income families pursue opportunities that
would otherwise be foreclosed to them. Nothing in the
Constitution imposes a one-size-fits-all approach to
public education, nor does it categorically prohibit
states from creating programs that emphasize parental choice over centralized control and that include,
among various educational options, private religious
schools.
---------------------------------♦---------------------------------
25
CONCLUSION
Respondents’ Complaint was properly dismissed
because it challenges a program of true private choice
that is fully consistent with the Court’s Establishment Clause precedent. The Respondents in Support
of Petitioners, Glenn Dennard, Luis Moscoso, and the
Arizona School Choice Trust, request the Court to
reverse the judgment of the Ninth Circuit and
remand the case with instructions to enter judgment
in favor of Defendants and Defendant-Intervenors.
Respectfully submitted,
INSTITUTE FOR JUSTICE
TIMOTHY D. KELLER
Counsel of Record
PAUL V. AVELAR
398 S. Mill Avenue
Suite 301
Tempe, AZ 85281
(480) 557-8300
tkeller@ij.org
October 15, 2010
INSTITUTE FOR JUSTICE
WILLIAM H. MELLOR
RICHARD D. KOMER
CLARK M. NEILY III
901 N. Glebe Road
Suite 900
Arlington, VA 22203
(703) 682-9320